On the corporate accelerator tsunamiPosted: November 27, 2013
Firstly let me start by saying that this is not about corporate VCs. I will say though that – like anywhere – there are some very good corporate VCs that “get it” (Google, SAP, Intel, T-Venture, etc etc) and some very bad ones that don’t.
This is about the tsunami of corporate accelerators and incubators that is upon us. In general I am very happy for corporates to take a shot at helping folks build companies through their accelerators / incubators.
Good vs bad accelerator
There are some good folks out there that understand the old corporate agenda won’t work when working with very early stage companies. These folks also understand that a corporate accelerator is about getting exposure to some fresh ideas, chaos, new tech trends, pieces of technology, having their own employees take a shot, etc …. but, realistically, probably not much more.
And then there are corporate accelerators that “…don’t want to miss another Facebook…” or “…want to build the next twitter”. Those are the ones that are going to end in tears. Those are the ones you probably want to steer well clear of as an entrepreneur.
It is close to impossible for corporate accelerators to be a success, if you measure success by expecting a large category defining multi billion company to make its way out of your programme. The reasons are so painfully obvious I am not going to detail them here.
Easy come, easy go
However even the good ones need to prove they are here for the long-term, because they have an easy come, easy go problem.
Running an accelerator for some of these companies costs the same or maybe less as renovating the lobby of their headquarters. For a multi billion revenue company desperate for innovation it is a no-regret move to set up a corporate accelerator. The problem is shutting it down again is also a no regret move.
It is not the core business, it will not impact revenues or margins, it will not disgruntle large customers (or any at all), “the programme is not meeting our cost of capital”… you can just see the discussion a few years down the road.
Corporate accelerators are low commitment players in a high commitment game. That’s a problem.
So I’m welcoming everyone to the table, but I want to see how you deal with that problem. Long term.